Renewable Energy Economy
4. RENEWABLE ENERGY ECONOMY
4.1. When we at Merton first conceived and promoted the policy we were too preoccupied to really give much thought to how far reaching the ramifications might be for the renewable energy economy. It wasn’t until 2005 that we began to speculate on the volume of renewables that would be required to meet the 10% policy. To date Merton and Croydon have implemented the policy about 60 times, and the GLA policy has netted many more large developments across the capital. This means that as every month passes we are increasingly confident in our projections. Currently our assessment is that for an urban borough with a population of approximately 150,000 it will take about 5,000 m2 of solar thermal panels, 100 kWp of photovoltaics and 100 micro-wind turbines to deliver a 10% policy. The solar thermals are a composite of solar thermal panels and ground source heat exchange pumps, the micro-turbines are a composite of a range of products up to a 6kW device. Not factored into the assessment (so far) are: biomass, biogas, hydro, solar air collectors, geothermal, or cooling technologies and systems.
4.2. Judging by the pace that boroughs are adopting 10% policies it is reasonable to estimate that by the time the LDF kicks in 2007/8 around 250 will have one. So it is possible to extrapolate from this the total UK demand for renewables: 5,000 m2 X 250 = 1,250,000 m2 of solar thermal panels, and 100 X 250 = 25,000 turbines and kWp of PVs. To translate this into a cash figure the cost of the technologies is also a composite: £400 per m2 of solar thermal, £5,000 per wind turbine, and £5,000 per kWp of PVs. This is then multiplied by the 250 borough totals: 1,250,000 m2 of solar thermal at £400 per m2 = £500,000,000; 25,000 turbines at £5,000 per turbine = £125,000,000; 25,000 kWp of PVs at £5,000 per kWp = £125,000,000 – which gives a grand total of £750,000,000. To put this in perspective, the total installed value of renewables in 2003 was around £35m and as a result of the 10% policy phenomenon this will increase by over 2,000% to £750m – and this does not include all the jobs created in the other disciplines and professions such as: architecture, services engineering, marketing and maintenance.
4.3. One major benefit of this exponential rise is that it creates guaranteed demand opportunities that companies can safely invest into. The R&D advances and sheer economies of scale have already reduced unit prices. A classic example of this is the Renewable Devices “Swift” wind turbine. When first marketed several years ago it was hand built in a workshop. Recently major investment has gone into the company and a machine tool production line set up, with the result that the unit cost has now fallen to below £2,000. The “Windsave” micro-turbine has also been able to lower its cost for the same reason. There will soon be a new generation of highly sophisticated vertical axis turbines, with companies like XCO2 investing in state of the art R&D.
4.4. As the 10%(+) policy concept has slid into the mainstream, a supplementary issue is constantly raised – which is that the initiative is to be warmly welcomed, but it only affects new buildings and doesn’t address the vast mass of existing houses. However, this is perhaps not the case…….……
4.5. Second implementation – B&Q superstore
…..because intriguingly the second development forced to meet the 10% policy opened up a vista to the future. The development was a 10,000m2 B&Q superstore, and when first confronted with the policy there was some concern at Merton that they might not enthusiastically embrace the idea - but to our surprise they immediately grasped the long-term advantages. To meet the 10% they proposed to install a large vertical axis wind turbine on the front of the building, micro-turbines, solar thermal and PV panels on the roof, and ground source heat piles in the foundations.
What was completely unexpected was them wanting to build a cylindrical glass renewable energy exhibition centre that customers would have to walk through on their way to the café. When asked why they are doing this they explain that they intend to sell micro-renewables out of the store in years to come. This makes perfect business sense and B&Q should be congratulated for their foresight.
And of course the reason why the notorious policy does help address the vast mass of existing houses is because the boom in the micro-renewable industry created by it means that the cost of the devices will soon be low enough for B&Q (and others) to realistically sell them out of their stores.
4.6. A word of warning
As the 10% policies begin to kick in across the country it will generate a lot of business for renewable energy installation companies. Although this will remove the need for Government grants to subsidise renewables in new developments, it will not help smaller companies that specialise in domestic retrofitting. Therefore, there is danger that were the funding schemes to be terminated then many of these smaller companies might go to the wall – and this would in turn stall the mainstreaming of renewables as there would be a dearth of companies to carry out the 10% work when it arrives.
